Latest market data

Stock search

As if the Obamacare
rollout hasn’t been confusing enough, there’s now another
complication to contemplate: the Small Business Health Options
(SHOP) exchange will not accept online enrollments until November
2014. SHOP, which provides insurance plans for companies with
fewer than 50 employees, was designed to make it
easy for small business owners to provide affordable health care, but the inability to enroll
online certainly complicates the task.

Now what? First, it's important to understand the scope of this
latest Obamacare delay. Companies interested in shopping for a
SHOP plan can still do so—you can view available plans on the
federal site. But to enroll, you’ll need
to go to a broker or straight to the insurance carrier
offering the SHOP plan you choose.

If you live in a state that has its own healthcare exchange, this
delay might not affect you at all. Some states, including
California and Colorado, have fully functional SHOP exchanges up
and available for online enrollments. Check your state’s exchange
for details on the deadline to enroll for a plan effective
January 1, 2014. On the federal exchange the deadline was
extended to December 23, and many states have followed suit.

Most insurance experts agree there are still some companies that
should endure the hassle of enrolling in a SHOP plan: those who
are eligible for tax credits. That's because despite the latest
delay, it is still true that you must purchase a SHOP plan to get
a tax credit in 2014. And for a small subset of
companies—particularly those with fewer than 10 employees and
average wages of $25,000 or less—the credits can be significant.

Be aware, though, that plan choices for 2014 may be limited and
could vary significantly by state, advises Cameron Kennedy, chief
financial officer of Cambridge Consulting Group in Troy, Mich.
"From what I’ve learned from our carriers here in Michigan, the
bottom line is there will always be more plan options and more
flexibility off the SHOP," Kennedy says. "The only real benefit
to going to SHOP is you have to be on a government exchange to
get that small business tax credit."

If you choose to ditch the SHOP option, but you still want to
provide health benefits, you may be able to purchase a low-cost
2013 plan—but you have to act fast. If you already have a plan in
place and you renew it by the end of December, you may be able to
lock in your current premiums, thereby avoiding the rate
increases expected across-the-board for plans that comply with
the Obamacare regulations that go into effect January 1. Or you
can enroll in a new plan, and choose an effective date of
December rather than January.

Anthony Lopez, manager of the small-business group at Mountain
View, Calif.,-based eHealthInsurance, says small companies are
racing to purchase 2013 plans. "We’re getting a flood of calls
from customers saying 'I've seen the January rates. I need to get
a quote for a December 15th effective date,'" Lopez says. "It’s
one of the busiest Decembers I can remember." Many carriers are
now giving companies until Christmas to apply for a 2013 plan
with a December effective date, Lopez says.

One positive outcome of the ongoing delays—not only with the
health exchanges, but also with the employer mandate for
companies with more than 50 employees—is that entrepreneurs now
have plenty of time to educate themselves about their options for
2015, says Rick Ninneman, Colorado regional director of Poms
& Associates Insurance Brokers in Denver. "Employers have an
opportunity to gain a level of education that will allow them to
make high-quality decisions about what’s appropriate for their
companies," Ninneman says. The small companies his firm advises
are looking into a range of options beyond the exchanges, he
says, including self-funding their health plans
or joining professional employer organizations so
they can bring their costs down by being included in a larger
pool of employees.

Entrepreneurs should keep an eye out for more health plan choices
to emerge next year. For example, private insurance
exchanges—which were traditionally offered only to large
companies—are starting to reach out to small employers. Several
brokerage firms, including Cambridge Consulting, plan to launch
insurance exchanges specifically for small companies next year.
Brokers, Kennedy explains, "can negotiate with carriers to get
favorable provisions and to offer three or four plans to an
employer group," Kennedy says. "Plus the technology for online
enrollment has really improved. Private exchanges at the
small-group level are going to work well."